How to Make Impossible Decisions

Over the entirety of my career, I have repeatedly witnessed very smart CEOs and individuals stumble when making one kind of decision...

The Impossible Decision

In general, most people can decide between two options: An option that is good, and an option that is better.

This is often an easy decision to make.

Sometimes people freeze temporarily in deciding between TWO great options.

For example, if you get an offer from McKinsey and BCG, that’s a tough choice. But in reality, it’s not a tough choice because both choices are really great. You really can’t go wrong with either decision.

Where very smart people often completely lose their ability to think clearly is when it comes to choosing between two terrible choices.

This is where otherwise super rational, highly analytical people completely lose it. That’s because it's in this specific scenario that emotions and psychology come into play.

This specific example I’ve seen comes from when a business is failing and the CEO must decide whether to admit failure and lay off employees, or in some cases admit failure and shut down the business entirely.

I want to show you what this specific pattern looks like so you can recognize it, learn which human psychology biases will cause you to freeze, and learn how to avoid a major mistake in these kinds of decisions.

Scenario 1:

Given the choice between a great choice and a good choice, everybody generally picks the great choice.

Scenario 2:

Given the choice between two really great choices, most people will debate the choice somewhat but they ultimately pick one since they are both great choices.

Here’s where people run into problems:

Scenario 3:

When given TWO equally terrible choices, most people can’t decide. They freeze.

Now logically, Scenario #2 and Scenario #3 are logical equivalents. When you are faced with two options that are equal in their value, debate all you want but ultimately any arbitrary choice is equal.

But for some reason when the equal choices are both great, it’s easier to decide than when both choices are equally terrible.

From a purely logical standpoint, this doesn’t make any sense.

And if you struggle to understand why this is the case, you’re forgetting one incredibly important and insightful thing...

We’re dealing with people, and people are NOT rational 100% of the time.

I don’t care how many PhDs you have, how perfect your standardized test scores are in math, logic, science or engineering. All human beings lose their ability to think logically, especially when they are under emotional stress.

And if you happen to feel that you don’t get thrown easily by emotional stress, I will argue quite strongly that you are wrong, wrong, wrong.

All human beings face emotional distress from time to time. The only difference is whether or not you are aware of how this stress is impacting you, and the decision-making biases these stressors tend to have on logical decision making.

In short, all people, myself included, are capable of making bad and illogical decisions under certain emotional stressors.

The key is to be aware of this tendency.

That is the purpose of this article -- to help you be AWARE of tendencies that most people have so that you can look out for, and protect yourself, from making a stupid decision that under any other set of circumstances you probably would never make.

Here’s the missing X factor.

In Scenario 2 when you’re deciding between two great options, it’s a given that you will pick one of them.

If you win the lottery and have your choice of winning $10 million in U.S. Dollars or gold bars, who really cares? Take either one and enjoy it.

Because both options are substantially better than the status quo, taking either one is an easy decision.

However, in Scenario #3 where you choose between two terrible options, both options are worse than the status quo.

This turns out to be profoundly important to realize, recognize, and appreciate.

What’s different about Scenario #3 is there is often the illusion of having the option of choosing neither option.

So if you get a major infection, and you are offered the choice of amputating one of your legs or to take an experimental drug that will cure the infection but will cause moderate brain damage, which do you choose?

Do you choose to lose a leg or lose your mind?

In this example, there are clearly no good options. So what do many people do?

They procrastinate and refuse to choose either option.

In other words, they are in DENIAL.

Here’s the thing to realize. We have a logical reasoning center of our brain. We also have an emotional center of our brain.

Highly logical people tend to think the logical center rules the emotional center of the brain. And for highly logical, less emotional people that may be the case some (if not most) of the time.

But, that is not true 100% of the time.

A less emotional person is not a person with no emotions, but rather one that is less aware of the impact and magnitude emotions have on him or herself.

Most people consider me to be a pretty analytical and logical person. I will be the first to tell you that I have been in denial at multiple points in my life.

The hard part about denial, especially for a logical person, is that there’s a tendency to (mistakenly) believe such illogical behavior is not possible from me.

I think that’s incorrect.

I’m probably logical a greater percentage of my day than the average person, but this comes with a downside. It means that it will take a more extreme set of circumstances for me to be in denial about a difficult decision.

The implication of this is that when the stakes are greatest, the likelihood of my being in denial is at its highest.

In addition, because I am so logical so much of the time, I have had very little practice and experience in dealing with this part of myself.

It is the recipe for a perfect storm.

For some reason I don’t quite grasp, Scenario #3 decisions where you’re choosing between two terrible choices tend to have a deadline.

You’ve received a diagnosis of a life-threatening illness. You need to choose between two terrible treatment options. If you wait too long, you die.

Your business has hit the wall financially. You are in a financially unsustainable position. You need to choose between two terrible financial options. If you wait too long, you run out of cash and are forced into bankruptcy.

You didn’t do well recruiting and are faced with two terrible job offers. If you wait too long, both terrible job offers will go away and you will have no job offers.

So what should you do in such a situation?

I will tell you the solution.

However, I am extremely hesitant to do so.

Here’s why.

The solution will seem so simple and obvious that I fear it will be insulting to you.

That’s because you’re not currently in a crisis situation facing two terrible choices.

When you are in such a situation, I am hoping you will remember my simple guideline. The key to operating under extreme stress is SIMPLICITY.

SIMPLE = Easy to Remember, Easy to Do.

When you are faced with two terrible choices, what you should do is:

Pick the LEAST WORST choice.

That’s it.

Here’s why this is so difficult to do (and also why the suggestion is profoundly useful).

Most people, especially very successful people, are accustomed to picking the “best” option.

In a situation when you’re facing two terrible choices and a status quo situation that’s even worse than the two terrible choices, NO BEST CHOICE EXISTS.

A successful person who has been successful most of his or her life is accustomed to picking the better of two choices. A successful life is comprised mainly of good situations similar to Scenario 1 (good vs. better choices).

When such a person hits adversity, their decision-making model of looking for the best choice breaks down. When no best choice exists, the person accustomed to looking for the best choice keeps scanning and analyzing and re-evaluating the situation, looking for the best choice.

When none exist, the person doesn’t know what to do. He or she keeps looking in an endless cycle looking for the best choice.

The problem is NONE EXIST!

This is where denial kicks in. They are looking for something that does not exist because that is what they’ve done their entire lives. And for the entirety of their lives, that approach has worked... until NOW.

So when you’re faced between two terrible choices, and a status quo that’s even worse; the optimal course of action is to ACCEPT that no good choices exist and pick the LEAST WORST one.

And generally, picking the least worst choice FAST has a better outcome than either 1) not making any choices at all so the far worse status quo situation deteriorates, or 2) picking the least worst choice late.

For some reason in crisis situations, speed is your friend.

A terrible choice chosen and acted upon ferociously has a better chance of turning around your situation.

If you have cancer and are given the choice of two terrible treatment options... better to flip a coin, take one option now, than to wait 2 years hoping for a better option to come along.

If you are facing financial crisis and have two possible (but terrible) options for turnaround, in general taking either one NOW works out better than doing nothing for 12 months.

You may read this entire article and it may seem terribly obvious to you and thus not applicable.

Or you may have worked in consulting and seen clients make seemingly irrational decisions to the point where you think the clients are stupid.

If either of these are true, then you may be severely under appreciating something profoundly important in consulting, in your career, and in your life.

Humanity.

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I have to disagree with your post 🙂
I am currently facing a Scenario #2 situation but it’s been extremely difficult for me to choose between one of the options for one simple reason: external factors.
In my case, option 1 is a good job in my current city which gives me stability (i.e. my family, friends and boyfriend live here); the “downside” is that it will mean a change of sector and it causes me distress that it won’t suit me. Option 2 is a great job that has been offered to me as a result of 2 years of hard work; there’s also a “downside”: it’s in another country. This is the reason why I’ve been thinking over and over whether I should take one of the other and it still causes me a continuous headache, since sometimes the great option comes with downfalls.

I guess probably you didn’t understand what Victor is intending to say. It is difficult to choose between options when both are worse than status quo.

In your case, you take either decision but it won’t take your life.

It all depends at the moment what is your priority. If you want family and friends, then continue with you current job and find another job in the same city…

If you think your current job will ruin your career then you should go to another country for the job, and give a try to it. Because if you are smart enough you can make ‘friends and family’ anywhere in the world. I think your current job was not making you happy (I guess), that is why you applied for new job and finally you got it.

Nothing comes in life for without having any disadvantage associated with it.

With respect, Manish, I don’t think she was asking for assistance in making her decision, and I certainly don’t think that we as outsiders are qualified to help her make that decision.
There may be other factors we don’t know about, maybe she’s really attached to her family? Maybe she loves travelling and the new country would suit her? There are a million variables, and Sofia herself is really the only one who knows them all.

This is quite helpful… I’ll try to apply it but i still think selecting the ‘least worst option’ is about logical thought rather than emotion – and is that always the right way to lead your decision making?

I am in a situation where I am unhappy in my marriage. My wife is wonderful in many ways, supportive, loves me dearly etc. But I’ve been so unhappy for years – we have tried to sort things, gone to counseling etc, but I still don’t feel right. I am the carer for our young son, so only work part-time; my wife is the main earner. Circumstances beyond our control mean my wife now works away from home throughout the weeks, leaving me alone, and without any real opportunity to ‘live’ – as I live in the middle of nowhere and with childcare responsibilities.

So. Do I stay in my safe, secure marriage for the sake of my wife and son, knowing I no longer feel content in myself
or…
Do I leave, enter a position of financial difficulty – essentially still raising my son on my own, but now with more control over where I live and a hope (but no guarantee) of a happier relationship in the future?

I’m sorry you find yourself in a difficult situation with no good options. You have some more thinking to do on your end.

I will add a few general points that I’ve noticed / come to believe to be true. This is more philosophy than an empirically derived conclusion.

1) Anytime you’ve 100% certain you’re on the wrong path, change direction. With a change, at least you have a greater that 0% chance of a positive outcome. Your first attempt may not be exactly right, but by taking action from the known incorrect path, you will learn and iterate.

A business example of this is when you make a hiring mistake and hired a terrible employee. In this specific situation, I have found repeatedly it never ever gets better. The only solution is to fire quickly, absorb the hit, and get on with finding a better employee.

When one lives with a mistake, one devotes zero energy towards finding a better solution. When one acknowledges the mistake, accepts the consequences of it, after the initial disruption, all remaining energy goes towards finding a better solution.

The problem with a bad employee is they cause a lot of damage. No employee isn’t great, because work isn’t getting done. But the wrong employee, not only doesn’t get work done but creates a lot of problems that need to be cleaned up.

2) When choosing between a 100% certain bad path, and a path that has higher potential for a positive outcome; in many cases the situation gets worse than the status quo before it gets better.

In a business context, if you over hired too many people and must do a layout for financial survival. Initiating a layoff is worse than maintaining the status quo. The difference is initiative a layoff is a temporary pain. The difficult has a finite end. Not admitting a mistake and initiating a layoff has an infinite consequence (at least until the business goes under).

Not all business situations map perfectly to personal ones. So I am not speaking in code as to what you should do. I’m illustrating a principle I’ve found to be true in my professional (and personal experience). It’s up to you to determine if it applies to you in your specific circumstances.

3) With respect to the way you framed your dilemma – stable but unhappy situation with your spouse, or divorce and hope for a better relationship with someone else in future, I think this is the incorrect frame.

I think the more concrete way to think about it staying married versus being divorced (without any future partner being considered in the decision).

In other words, is the concrete situation of being single and unattached better than the concrete situation of remaining married and unhappy.

I think the two concrete comparison is a bette way to think about the situation. Hypothetical future spouses invite endless mental speculation that gets you nowhere.

The question to consider is assume you never find another spouse, would you rather be single now versus married + unhappy.

The reason for this thinking is because both scenarios are fully within your control. You can choose to remain married (assuming your spouse still wants to), or you can choose to NOT be married. These are you two concrete choices.

A hypothetical future spouse is not within your control. From a decision making standpoint, it is more conservative to assume a future spouse / partner never emerges. Given that assumption, would you still rather be single than married and unhappy with no chance of improvement?

Just something to think about that’s more concrete and within your control.

thanks for taking the effort to respond – you make a good deal of sense! I suppose I’m framing things around the potential of finding new love as that potential is a concrete benefit of becoming single. Whether that potential is realised is, as you say, not entirely within my control.

So, my issue seems to be comfort+hopelessness vs discomfort+hope.

(Of course, no emotional system is as binary as that.)

Anyway, as I said, many thanks for your response – I’m mulling it over and seeing where it might take me.
Pete.

Very useful article. I have a scenario 3 , I need to make a decision between two bad choices for marriage. Both the guys are not so suitable for me but I need to make up my mind quickly as its already too late for my marriage and if I delay more I may end up with more worst choices plus consequences of not being able to have my own children. For sure taking a chance for either of them is better than never marrying & not having a family at all.

However which one to go for is not an easy decision. Both lack some or other of the important criterias I would look for in future spouse. Yes I am mostly successful ,very logical & analytical person , always choose best among good. Now I think I am stuck. I don’t know which one is least worst. please advise.

For such a high stakes decision, only you can make the final decision. The reason is you’re the only one who will bear the consequences of your choices and the right (or “least worst”) choice will vary by individual and their specific values.

The least worst choice for me could be quite different than for you as we are different people with different preferences/values.

I will point out that the way you framed your question, presumed you had only two choices: Person A vs Person B.

Purely logically, and to be MECE about it, another option is neither Person A or Person B. In other words, keep looking for a more compatible partner.

This is of course not without risk (e.g., you may not find a suitable partner during child bearing years).

Your statement also presumes 1) both person A and B will want to marry you, and 2) that by marrying Person A or B, you will indeed have children.

Other factors to consider are how happy you will be in a particular marriage and what kind of family life your children will have with a specific father.

Ultimately, your choice boils down to do you choose a (somewhat) certain mediocre or negative outcome, or the uncertainty associated with pursuing a better outcome (which may result in a far worse perceived outcome if the better one doesn’t materialize).

For a decision like this, I would suggest letting your emotional sense weigh in heavily. I would also suggest not making a decision based on fear. I have known many people (myself included) who have done that and it rarely works out well.

One way to tell how much fear is influencing your choices is to do the following thought exercise: If I had no fear, would I still choose X option?

Separate from this decision, it is also worth doing some perceived “worst case scenario” planning. If you married person A, then what would you do? If you married person B, then what would you do? If you didn’t marry either, kept looking for another partner, but could not longer have biological children of your own, what would you do?

For some people, it is helpful to covert a generalized fear into concrete specific fears/concerns… and to create contingency plans to address specific concerns.

You can’t create a contingency plan around generalized fears/concerns, only specific ones.

I happened upon your original article and while my situation has nothing to do with recruiting or business per se, it does have to do with finances… as well as personal needs.

I am currently renting an apt. I am also a homeowner with renters of my own who are moving out this weekend. I have not been able to secure new tenants and I cannot comfortably cover both my rent and mortgage, for even one month. So my tenants move out on the 9th and I have one day to make a decision and mat give notice to the property managers of my apartment by the 10th if I intend to move out at the end of this month.

To give you an idea of what’s at stake, my stress level reached dangerous levels during the wee hours of yesterday morning. I felt like I was having a combination panic/stress/heart attack, all at once.

The most pressing issues at hand are as follows: Renters continue to damage my property thereby increasing the cost to maintain it and ultimately lowering the profit I stand to make when I eventually sell which I foresee happening in the next 3 to 5 years. The logical move would be to take up residency in my townhome again to minimize the wear and tear and to prep it for sale.

Here’s where the humanity piece comes into the picture: The neighborhood my townhouse is in is much less safe than the neighborhood my apartment is in. All violent crimes including rape and assault are more than twice the rates of where I live now. So these statistics are not just numbers, they are fears, shadows that lurk menacingly at the edges of my thinking as I contemplate making this decision.

So, how do you make a decision when one option is around finances (which is related to your security and indirectly to your safety, over the long haul) and one option is around your immediate safety. Do you trade your immediate safety for long-term safety…?

There are additional strands that complicate my choice… I have a daughter still living at home so I have fears around her safety. I was once attacked in the neighborhood so I have residual PTSD when I am in the area and in the home. When I walk into the townhouse, and I visualize living there again, all I want to do is cry… but ‘the struggle is real,’
as they say. My house is my primary asset. I cannot leave this asset to chance and there are many renters who treat their residence appallingly.

I see you dilemma less as a choice between two bad options, and more as a choice between two priorities.

If your #1 priority is finances, then one option is clearly the better and lower risk financially. If your #1 priority is physical safety, then the other option is clearly better and lower risk safety wise.

The question is which factor is more important to you? THAT is the key decision. Once you decide that, the rest is more straightforward.

Unfortunately, I can’t make the specific value decision for you because I’m not the one that has to bear potential consequences. My tolerance for physical risk and for financial risk will be different than yours (or anybody else’s for that matter).